Improving Cost-Benefit Analysis to Account for Existential and Catastrophic Risks
Cost-benefit analysis is at the heart of the modern American administrative state. It governs both the process and goals of “good” government, defining what interests truly count. However, current guidance lacks an adequate framework for one of the most important problems of this century: the risk of global catastrophic harms to present and future generations, including human extinction.
We can change that.
Developments in our understanding of science, economics, and ethics make it possible for modern cost-benefit analysis to more accurately account for these societal values. In recognition of this fact, the Biden Administration has tasked the Office of Management and Budget (OMB) with “producing a set of recommendations for improving and modernizing regulatory review,” including how cost-benefit analysis can account for “the interests of future generations” and “fully account for regulatory benefits that are difficult or impossible to quantify.”
This competition is a response to that call to action.